Foreign gyms work out to NZ routines

By LIBBY MIDDLEBROOK

They are everywhere. Hundreds of fitness infomercials pump into our living rooms every month via television, promising to rid thighs, stomachs and bottoms of superfluous blubber.

While most seem to be designed and promoted by tiny lycra-clad American women, an Auckland-based export company has carved its own niche business out of the competitive global fitness industry.

Les Mills International, the export arm of one of Auckland's largest gyms, Les Mills, is selling New Zealand-designed fitness systems to gyms from New York to Beijing.

More than 4000 fitness centres in 40 countries have bought licences to copy the company's aerobic workout programmes, which include written teaching manuals, videotapes, promotional material and music.

"This market has got huge growth potential," said the chief executive of Les Mills International, former Auckland Mayor Les Mills. "Millions have been invested in this company and we're expecting to make our first profit for the 1999-2000 year."

The opportunity for an export business focused on aerobic programmes arose in the early 1990s when gyms around the world started to include aerobic workout facilities in their operations.

Mr Mills' son, Phillip - the majority owner of Les Mills International and the New Zealand gym chain Les Mills - set up the export business in 1996, offering six different programmes to schools, council-owned fitness centres and gym chains worldwide.

The programmes, which are updated every three months with new music and alternative aerobic routines, are developed by more than 40 aerobic choreographers and come complete with training workshops and instructor tips on how to speak and move when delivering classes.

Employing 15 fulltime staff, Les Mills International also invests in research and development to test the safety and physical benefits of its export fitness programmes, which are 98 per cent manufactured overseas.

"It was a hugely difficult business to set up - finding the right agents, recruiting trainers and getting promotion material out," said Les Mills, who took over as chief executive of the export business after losing the Auckland mayoralty in 1998.

"When I started I gave the business a 50-50 chance of failing. A lot of money had been invested, but it wasn't making any money. We've turned a corner now and there's no chance that it won't be successful."

Today the company has 20 agents scattered around the world, who are contracted by Les Mills International to promote, sell and manage fitness programmes in exchange for a sales royalty.

Their input into the business goes much further. Agents, who range from Iceland-based travel consultants to former Australia-based gym owners, can be responsible for gaining playing rights to music, organising translations for video and written material and organising patents on the fitness programme titles, including Body Pump and Body Balance.

In 1997, a US agent and Les Mills International jointly paid more than $75,000 to buy the rights to "Body Pump" from a hydraulic fluid pump manufacturer.

"We have very close relationships with our agents and invest a lot of time and money in them," said Les Mills. "We're not a big company on the global scale, but we are a niche market, so they're really important to us."

Les Mills International also encourages agents to protect the company's fitness programmes from being replicated by gym operators who do not hold licences. Since 1998, the company's Germany-based agent has been involved in more than 20 court cases.

"It happens everywhere. Some agents are more rigorous about it, but we absolutely encourage all of our agents to police it."

In the short term the company, which Mr Mills says has a "multimillion-dollar turnover," plans to set up an office in Europe, where 48 per cent of its export business is generated. It is also considering contracting new agents in Taiwan and India.

Market research has become an important tool in the business after several United States gym operators cancelled their licences because of music sold by Les Mills International to accompany a fitness programme.

"We have to watch the US. They are the toughest market because they have very strict moral values. They have very strong feelings about material that comes through on music albums. Sometimes things are just not sanitised enough for them."

The company plans to launch two new fitness systems this year and set up a certification programme for instructors once they have completed training workshops.

Home video fitness programmes are an option, along with infomercial advertising.

As for Mr Mills, he plans to retain his chief executive role until the end of next year, when he will return to sports coaching.

"I took this job for three years as opposed to retiring. It was a business that was growing and it basically needed very strong business control, but sports coaching is what I really want to do."